ISLAMABAD: Minister for Finance and Revenue Shaukat Tarin on Monday said that the reforms measures being taken by the incumbent government would help bring the whole retail sector worth Rs20 trillion into the tax net.
“The total sale of retail sector in the country is Rs20 trillion, and Rs16 trillion of it is not in the tax net,” he said while briefing the Senate’s Standing Committee (SSC) on Finance and Revenue.
The committee continued its deliberations under the chairmanship of Talha Mehmood on the fourth consecutive day to finalise its recommendations on the Finance Supplementary Bill 2021. The minister said that the Federal Board of Revenue (FBR) had refunded some Rs50 billion in six months, which had never happened in any government’s tenure.
He said that the sale of the pharmaceutical industry was around Rs700 billion but it was paying tax on only Rs100 billion.
A number of sectors like fertiliser, pesticide, and agriculture did not fall under the tax regime, he added. Shaukat Tarin said that the International Monetary Fund (IMF) wanted to tax Rs700 billion, but the government brought the target down to Rs343 billion through negotiations.
He said the IMF’s review meeting was postponed to January 28 on the government’s request, adding that no additional tax was imposed on the infant formula milk of normal price, rather only expensive imported one was suggested to be taxed.
He clarified that all amendments pertaining to the tax were not being undertaken under the IMF’s pressure as the government already had the agenda to bring tax reforms for the socio-economic development of the common man.
The committee chairman asked the government to take the parliament on board whenever it would opt for any IMF programme in future.
The minister said that the government had a cushion of Rs33 billion to provide subsidies on laptops and solar panels. The Federal Government was also considering bringing the agriculture income under tax and for that Punjab and Khyber-Pakhtunkhwa governments had already agreed, while negotiations with the AJK and Gilgit Baltistan governments were in progress, he added.
“We will also convince Sindh and Balochistan in this regard.” He said the rise in exchange rate was due to international commodity prices and the situation in Afghanistan.
The minister added that in order to promote tax culture, the government had launched a cash price scheme for the public. The supply chain could play an important role as Rs15 trillion could be collect from that source.
Through the track and trace system, cigarettes and other industries were being brought under the tax net, he added. With respect to the State Bank of Pakistan (SBP) bill, the minister dispelled the impression of compromising the country’s autonomy.
The government successfully pursued the IMF to omit five important clauses from the bill. The employment period of the SBP governor would be reviewed by the government itself.
While discussing the proposed Supplementary Finance Bill, the committee recommended withdrawing tax on desalination plants, and medical, surgical, dental and veterinary furniture.
It also proposed to withdraw tax on machinery and equipment for development of grain handling and storage facilities, including silos.
The committee also rejected additional tax on imported yogurt, butter, Desi ghee, milk and cream. The meeting was attended by senators Farook Ahmed Naek, Saleem Mandviwala, Sherry Rehman, Mohsin Aziz, Zeeshan Khanzada, Musadik Masood Malik, Syed Faisal Ali Subzwari and Faisal Saleem Rehman.
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